A New Prediction Market for the Masses

For those of you who love prediction markets (a variety of which we’ve written about in the past), there’s a new site that looks to be as vast, inclusive, and user-friendly as anything I’ve seen: Predictify.

You can wager on standing bets (who will be the Yankees’ next manager, e.g.) or “tap collective wisdom” (I hope they’re paying Jim Surowiecki a royalty) by putting a question to the public.

There’s a free version of the question model in which you get 100 responses from the public, as well as a premium version that, if the audience proves to be dependable, might soon become every marketer’s best friend.

The featured bet when I visited the site was established by Scott Adams of Dilbert fame, asking how many copies of his new, non-Dilbert book will be in print by January 2008.

Great bet — as long as you can believe the publisher’s number. (Hint: search for “biggest joke in history” in the link provided.)


Cliff

An odd thing about prediction markets as opposed to sports gambling or stock exchanges is that there don't appear to be any rules against insider trading or betting against your self or team. Will the tail wag the dog?

caveat bettor

Cliff, maybe the insiders have information that will be reflected in a more accurate price?

Matt Deckard

I'm surprised you linked to Adams' blog without making any reference to his very Freakonomics-esque observations about the differences in predictions between different demographic groups and his theory that it might have something to do with the relative optimism of people in said groups:

http://dilbertblog.typepad.com/the_dilbert_blog/2007/10/hiring-republic.html

Emile Servan-Schreiber

Predictify may be a fine "for dummies" prediction game, but it certainly isn't prediction "market". It's rather more like parimutuel betting. The distinction is important because prediction markets reward people not just for being right, but for being right before others. Prediction markets have demonstrated again and again their ability to aggregate information and produce accurate predictions, whereas prediction games like Predictify still have everything to prove.

It is deeply misleading to call any wisdom-of-crowds contraption a prediction market.

AP

Emile, check out the FAQ on Predictify. They do address time in the sense you mention in your post (people are considered MORE accurate, the earlier they predict). And the accuracy rating, in turn, influences the user's payout on questions which have money behind them. So time counts although they don't mention the weight given. Very interesting.

http://www.predictify.com/help.aspx

“Predictify tracks each user's accuracy on both Premium and Free questions, where accuracy is a function of the correctness of a response and the time of submission (earlier is better).”

Peter

This is history in the making, folks. An x-group prognostic market (aka betting exchange aka predictability device).

Jed Christiansen

I agree with Emile here.

Predictify appears to me to be a more sophisticated polling site. In a market, there is an element of risk and consequent reward. I might be willing to risk $100 on my forecast of the presidential election, but only $10 on my forecast of the World Series. That is taken into account in a prediction market, or market of any type.

Most markets allow buying and selling, which could also "lock in" profits based on price movements. While you can change your vote on Predictify, that doesn't make you any money, real or virtual. You're just registered as changing your vote.

While polling certainly is an information aggregation mechanism, and fits into the "Wisdom of Crowds," it doesn't really appear to be a "market."

Smack Fogarty

Jed and EJSS, a prediction market consultant, and the CEO of a struggling prediction market company, make valid points, but WHO CARES? The general public certainly doesn't. You can continue to quibble all you want and ride the high horse, but if Predictify works, it works, and that's all anyone cares about. Let's at least congratulate them on coming up with a unique model.

Matt

Smack,

I think the "valid points" here are pretty important, because they are actually questioning whether Predictify works or not. There doesn't seem to be any evidence that it does - that's the point.

Ron

Without having to endure risk, prediction markets will not offer the wide spectrum of human utility.
i.e. in real life, I would flip my penny to win a penny, but not my $100 gold spanish coin to win another.
At predictify there is no risk, so I would flip the gold Spanish coin...

Cliff

An odd thing about prediction markets as opposed to sports gambling or stock exchanges is that there don't appear to be any rules against insider trading or betting against your self or team. Will the tail wag the dog?

caveat bettor

Cliff, maybe the insiders have information that will be reflected in a more accurate price?

Matt Deckard

I'm surprised you linked to Adams' blog without making any reference to his very Freakonomics-esque observations about the differences in predictions between different demographic groups and his theory that it might have something to do with the relative optimism of people in said groups:

http://dilbertblog.typepad.com/the_dilbert_blog/2007/10/hiring-republic.html

Emile Servan-Schreiber

Predictify may be a fine "for dummies" prediction game, but it certainly isn't prediction "market". It's rather more like parimutuel betting. The distinction is important because prediction markets reward people not just for being right, but for being right before others. Prediction markets have demonstrated again and again their ability to aggregate information and produce accurate predictions, whereas prediction games like Predictify still have everything to prove.

It is deeply misleading to call any wisdom-of-crowds contraption a prediction market.

AP

Emile, check out the FAQ on Predictify. They do address time in the sense you mention in your post (people are considered MORE accurate, the earlier they predict). And the accuracy rating, in turn, influences the user's payout on questions which have money behind them. So time counts although they don't mention the weight given. Very interesting.

http://www.predictify.com/help.aspx

"Predictify tracks each user's accuracy on both Premium and Free questions, where accuracy is a function of the correctness of a response and the time of submission (earlier is better)."

Peter

This is history in the making, folks. An x-group prognostic market (aka betting exchange aka predictability device).

Jed Christiansen

I agree with Emile here.

Predictify appears to me to be a more sophisticated polling site. In a market, there is an element of risk and consequent reward. I might be willing to risk $100 on my forecast of the presidential election, but only $10 on my forecast of the World Series. That is taken into account in a prediction market, or market of any type.

Most markets allow buying and selling, which could also "lock in" profits based on price movements. While you can change your vote on Predictify, that doesn't make you any money, real or virtual. You're just registered as changing your vote.

While polling certainly is an information aggregation mechanism, and fits into the "Wisdom of Crowds," it doesn't really appear to be a "market."

Smack Fogarty

Jed and EJSS, a prediction market consultant, and the CEO of a struggling prediction market company, make valid points, but WHO CARES? The general public certainly doesn't. You can continue to quibble all you want and ride the high horse, but if Predictify works, it works, and that's all anyone cares about. Let's at least congratulate them on coming up with a unique model.

Matt

Smack,

I think the "valid points" here are pretty important, because they are actually questioning whether Predictify works or not. There doesn't seem to be any evidence that it does - that's the point.

Ron

Without having to endure risk, prediction markets will not offer the wide spectrum of human utility.
i.e. in real life, I would flip my penny to win a penny, but not my $100 gold spanish coin to win another.
At predictify there is no risk, so I would flip the gold Spanish coin...